Paxos Unveils Game-Changing Proposal for Hyperliquid’s USDH Stablecoin with PayPal Integration

Breaking the mold—Paxos just dropped a bombshell proposal that could reshape stablecoin dynamics.

PayPal Integration: The Main Event

Imagine tapping into PayPal's massive user base overnight. That's the play here. No more begging legacy finance for approval—this move bypasses traditional gatekeepers entirely.

Hyperliquid's USDH Gets a Turbo Boost

Paxos isn't just tweaking the engine; they're installing a nitro booster. USDH suddenly looks less like another stablecoin and more like a legitimate threat to the old guard.

Why This Isn't Just Another Partnership

Forget the usual corporate handshake deals. This integration actually makes sense—unlike those desperate 'blockchain solutions' banks keep announcing before quietly shelving them.

Will TradFi Finally Wake Up?

Watch traditional finance scramble now. Their 'stablecoin working groups' might actually have to produce something besides PowerPoint slides and consultant fees.

Bottom line: Paxos just showed everyone how it's done—while the banking sector was busy forming committees, they built a damn rocket ship.

Paxos Proposes USDH Integration Into PayPal Checkout

At the core of the strategy is a partnership with PayPal, which WOULD see USDH integrated into PayPal’s checkout and payment infrastructure.

The move also includes Venmo support and listing of Hyperliquid’s native HYPE token. Notably, the integration would enable PayPal’s on/off-ramps to support USDH at zero cost.

PayPal is also committing $20 million in incentives to help grow the Hyperliquid ecosystem.

To align incentives, Paxos proposed that all revenue from USDH will be reinvested into Hyperliquid’s growth and its Assistance Fund until USDH hits a $1 billion TVL milestone.

Even beyond that, Paxos will cap its revenue share at 5%, even as TVL exceeds $5 billion.

“Together, this framework ensures Paxos only wins if Hyperliquid wins,” the proposal stated, adding that it intends to position USDH as the default stablecoin for DeFi.

72 hours. Every comment read and concern addressed.

We’re out of the war room, with @PayPal + @Venmo on board.

USDH Proposal v2:

❏ PayPal ecosystem integrations + $20M incentives
❏ AF pledge starts at 20% and rises w/ TVL
❏ Paxos takes 0 until >$1B, capped at 5% past $5B pic.twitter.com/eLucHcw63h

Paxos also emphasized its regulatory credentials, pointing to its compliance with the GENIUS Act and its legal status as the only firm currently able to issue tokens in Europe.

It plans to include PayPal’s PYUSD as a reserve asset to bolster USDH’s legal and financial foundation.

Looking beyond retail users, Paxos is pitching Hyperliquid as a liquidity LAYER for enterprise-grade finance. It plans to integrate builder codes through partnerships with brokerages and fintech firms, attract asset issuers into Hyperliquid’s HIP-3 open market, and build an “Earn” product using USDH for consumer apps.

The proposal also aims to leverage HyperEVM for deeper DeFi integration.

Paxos’ offer is one among several. FRAX Finance proposed backing USDH with frxUSD, supported by BlackRock’s BUIDL fund.

Another consortium, comprising Agora, Rain, and LayerZero, is pledging a full net revenue share and claims neutrality. Proposals from Ethena Labs and Sky are also in the mix.

The Hyperliquid Foundation will remain neutral as validators begin voting on September 14. Proposals were due by September 10.

Trump-Backed GENIUS Act Boosts US Push for Dollar-Pegged Stablecoins

The recent passage of the GENIUS Act, signed by President Trump, aims to cement the dollar’s dominance by backing dollar-pegged stablecoins in global markets.

The Treasury Department expects the stablecoin market to exceed $2 trillion by 2028, a projection that places greater emphasis on liquidity, interoperability, and regulatory alignment across the ecosystem. Tether’s latest MOVE underscores a pragmatic shift toward that future.

As reported, Ripple CEO Brad Garlinghouse has said the stablecoin sector is poised for explosive growth, projecting the market could balloon from its current $250 billion capitalization to as much as $2 trillion in the near future.

“Many people think it will reach $1 to $2 trillion in a handful of years,” Garlinghouse said, adding that Ripple is positioned to benefit from that trajectory.

Meanwhile, Western Union is positioning itself for a new phase of digital transformation, signaling strong interest in using stablecoins to modernize its global remittance operations.